Whether preparing for a government audit or checking your own systems, an HR compliance audit is a great way to reflect on human resources operations, compliance with regulations, and adoption of best practices. Though it may seem to be overwhelming at times, if approached in the right way, it should not be stressful or annoying.

An HR compliance checklist helps the team prepare well for the HR audit. Let us try to understand in detail the components of the HR compliance checklist, the best practices for HR compliance, and other important considerations for the HR audit checklist. 

HR Compliance Audit Checklist – A Complete Guide

Government agencies undergo formal yearly HR audits to check compliance with regulatory standards. Businesses also benefit from HR compliance audits in the following ways.

• -Making sure the company follows the best practices for policies
• -Creating manuals for hiring employees and improving their performance
• -Improving the business reputation
• -Ensuring the systems deliver expected results
• -Keeping the business within employment legalities

The complete HR compliance checklist is broken down into several categories some of which we cover here. New laws and regulations are introduced from time to time. Apart from such changing factors, there are some aspects you can take note of when trying to adhere to compliance requirements for the HR procedures. 

HR Compliance Best Practices – UPDATED 2021

An HR audit provides a detailed assessment of HR activities and practices and identifies gaps between ideal and current operating procedures. It also outlines solutions to bridge any such gaps for better HR compliance.

Create or Update Employee Handbook 

Regardless of the number of employees, every company needs an employee handbook that contains information about the policies and procedures. It also outlines the HR best practices and gives the employees an idea of the company's expectations. Handbooks should be reviewed and updated regularly to ensure compliance with changing rules and regulations. They should also reflect the latest changes in the company policies.

Create or Update Job Descriptions

Job descriptions are critical components of HR processes including hiring and employee evaluation. Managers, as well as team members, should have copies of their job descriptions. You should also review them every year to prevent them from getting outdated. Ensure that the job descriptions reflect all the current responsibilities each employee performs.

Develop Hiring Process and Training 

A well-designed hiring process makes sure the organization selects the most appropriate candidates for open positions. Develop procedures for interviewing and hiring and follow them for all the decisions. Train the managers for proper interviewing skills so that they know how to test the applicant's skills and experience level. Training for behavioral interviewing would help managers identify the best fit for the position.

Devise Performance Evaluation Process

A solid employee performance evaluation process is a win-win for the staff and the company. Whether it is positive or constructive, feedback on the performance is a must for all the employees. Though companies have evaluation forms, they may not be a priority and are not always done consistently. Conducting employee evaluation on a consistent basis not only improves performance but also the employee/manager relationship.

HR Compliance Audit Checklist

Let us take a look at some of the most important items companies should include in their HR compliance audit checklist to make sure it encounters no penalty or fine.

Interviewing and Hiring Procedures

The HR compliance checklist should include details about interviewing applicants and an outline of how the job descriptions and application forms look like. It should also describe the interview procedure, the person in charge, and the questions asked.

The checklist should also include a review of contracts, offer letters, and orientations for newly hired. It should also include a review of documents provided upon hiring such as deduction forms, tax withholding, etc. 

Employment Handbook

The employee handbook should outline work-related guidelines for employees. It is a basic document concerning the HR issues for employees. It should address the policies related to the usage of the phone, the dress code, and internet policy among others.

The Equal Employment Opportunity policy should follow local, state, and federal regulations and should be reviewed regularly. The employee handbook should also define work relationships, benefits, and salaries. 

Employment Equity Compliance Checklist 

To ensure compliance with the Employment Equity Act, the company requires creating an Affirmative Action Plan when hiring employees. It is a diversity and inclusion plan aimed to include women, minorities, the disabled, and other members of underrepresented groups in the recruitment and training processes.

Any company with more than 50 employees and U.S contracts of over $50,000 should have this plan. Make sure you do nothing that violates the Equal Opportunity Commission laws like the Age Discrimination Employment Act, Title I of Americans with Disabilities Act, or Title VII of the Civil Rights Act. You should get the entire staff trained and certified by the EEOC to avoid compliance fines. 

HR GDPR Compliance – What You Should Know?

The GDPR (General Data Protection Regulation) is a new regulation for data privacy introduced to protect the personal data of European residents through a wide range of security and privacy requirements. Some of the most important tasks HR teams must address include:

• Privacy Policies – Under the new GDPR requirements, HR should not only uphold new rights but also clearly describe them in the form of updated privacy policies.
• Processes – Many of the current HR processes may have to be updated in response to the GDPR. For example, HR should only collect the data necessary for tasks at hand, demanding a revision of the process that requests personal data from employees.
• Security – One step HR can take to avoid non-compliance is to ensure employees always have the right level of access to employee data. The roles that truly need employee information should only be given access to it.
• File Management – The GDPR also requires new employee files signed and acknowledged by employees. A company should also emphasize deleting old data and can be fined for holding onto data it no longer needs. 

Conclusion 

The biggest difference between the HR compliance checklist of 2021 and the past years is the current pandemic consequences. When working with the checklist for compliance, it is important to note that many of the processes are being affected. Most companies have also introduced changes to the work environment which should be included in the policies and handbook. The HR compliance audit is a great way to ensure operations meet the newest regulatory requirements.